Why You Should Invest in the Decentralized Finance Market

If you’re familiar with the crypto space, you’ve probably heard of decentralized economics and the free trade principles it entails. The crypto world is on the frontier of decentralized finance, with new tokens and exchanges being designed with less intermediary engagement and greater accessibility for users. Decentralized economics is at the heart of major blockchain projects such as NFT video games and the metaverse. Having a solid understanding of the Defi market can help you make smart investment decisions and speculate about the long-term success of various crypto projects. Here are some Defi basics to help you begin your crypto journey.

Exchanges

When trading crypto, you can either trade on a centralized or decentralized exchange (DEX). Traditional exchanges require intermediaries who charge fees and prolong the trading process. While DEXs use automated smart contracts to verify trades between users without using a third party, creating instant and free transactions. Generally, centralized exchanges are more likely to be targets of hacking attacks because of their central nature; a hack could be seriously detrimental to many users. DEXs, on the other hand, are not likely targets because a hack would only impact one or two users instead of an entire central book of orders. Though DEXs sound highly beneficial, they are generally less user-friendly than centralized exchanges, making them the less popular trading choices. However, new crypto projects like the Serum DEX by FTX are attempting to create user-friendly and accessible DEXs for traders worldwide. Decentralized exchanges can allow people to instantly send cryptocurrency abroad without the interference of governments or banks, making a global economic system free of intermediaries where anyone can participate.

Tokens

When you enter the crypto space, you may feel overwhelmed by your options for investment. Today, more than ten thousand active cryptocurrencies are available on the market. Each new crypto token is specifically and uniquely designed to benefit and incentivize the holder. You can compare the rules, goals, and mission of the crypto token by reviewing its whitepaper. Like the new FTX Token, FTT, some tokens are designed with decentralized aspects in mind. For example, as a holder of FTT, you can receive free airdrops of SRM, used to trade on the new Serum DEX. The Serum DEX is a new decentralized exchange created by FTX and Alameda Research to make decentralized trading more accessible and user-friendly. FTX is also allowing its coin holders to participate in and help govern the future of the token. When entering the crypto space, invest in tokens that will offer benefits, incentives, and long-term gains through their projects.

The Metaverse

Investing and trading on DEXs is only one aspect of the Defi marketplace. Digital projects like NFT videogames and the metaverse take decentralized finance to the next level by creating self-sustaining virtual economies based on decentralized principles. The metaverse, when completed, will be a series of interconnected, synchronous, virtual universes where anyone with an internet connection can participate in virtual asset creation, exchange, experiences, and more. The metaverse attempts to integrate our daily lives with a more immersive internet experience. When completed, the metaverse will run off of a self-sustaining crypto economy based on decentralized principles, which allow users to make free and instant transactions of crypto or other digital assets. Today, there are already several metaverse projects users can join.

Many crypto projects are being launched and developed today that will significantly impact the future of decentralized economics. Start doing your research today to invest on the ground floor of these projects. 

Author Bio:

Alison Lurie is a farmer of words in the field of creativity. She is an experienced independent content writer with a demonstrated history of working in the writing and editing industry. She is a multi-niche content chef who loves cooking new things.

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